What is Web3 & why it matters
Technological advancements are happening all the time, and at an increasingly faster rate as our innovations compound upon one another.
One of those technologies on the rise is the concept of web3—the impacts of which could be far-reaching, not only for investors but a new and better future internet.
The idea behind web3
- We live in web 2.0 now. This is the internet era filled with bountiful resources and tons of easily accessible information and people alike. The problem is, it’s centralized by what we could dumb down to something like “big tech.” Example: Twitter can censor what someone tweets.
- Based on decentralization. In web 3.0, however, there is no central power that controls decisions and so tweets couldn't be censored. Also, intermediaries like banks would be bypassed, minimizing transactions costs; and our personal data would no longer be monetized to the extent it is now, with the end goal being more freedom for us layman users.
- Simply defined. Web3 means a decentralized app that's run on the blockchain, specifically the Ethereum blockchain. That means it's open-source and extremely efficient because anyone can participate—the community is the one with the power.
- Web3 doesn't equal crypto. While it's true that lots of folks in the crypto space are also the ones talking about web3 right now as crypto is the first use of the blockchain technology, web3 advocates are focused on the blockchain tech itself and its far-reaching future potential.
Web3 elicits a more democratic internet where the governance structure is one of mutual ownership and there's no risk of being blocked or denied access to services.
NFTs as a marketplace of digital assets and creative expression is an example that the movement towards web3 has begun. But only pieces of web3 exist today and much more needs to be done to build and scale the technology behind the aspirational vision.
Just as we've seen companies readying for web3, like Coinbase, rise to power, there's no doubt we'll see similar trajectories for companies with vested interests in this area of technology. While it is an entirely new frontier that would take some studying to truly understand, it could present a promising opportunity even in today's traditional markets.
💡 Related companies and funds: Blockchain ETFs, such as Global X Blockchain ETF ($BKCH), Siren Nasdaq NexGen Economy ETF ($BLCN), Amplify Transformational Data Sharing ETF ($BLOK), and companies such as Coinbase ($COIN)